Who determines the Wind-Down Activities that allow a Casiola franchisee to deviate from restrictive covenants?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
n of this Agreement, upon expiration or termination of this Agreement for any reason, Franchisee shall immediately pay to Franchisor all sums and fees due from Franchisee to Franchisor under the terms of this Agreement including, but not limited to Royalty Fees and Advertising Contributions and all other sums and fees due from Franchisee to Franchisor and/or Franchisor affiliates and/or suppliers for products and services including, but not limited to, System Supplies.
17.B. CEASE OPERATIONS AND PROTECTION OF THE SYSTEM
Upon expiration, termination, or Transfer of this Agreement for any reason, Franchisee shall immediately:
- (1) Permanently cease to be a franchise owner of the Casiola Business that was the subject of this Agreement and cease to operate such Casiola Business under the System, except as directed by Franchisor in writing and related to Franchisee's performance and completion of Wind-Down Activities as designated and determined by Franchisor in Franchisor's Reasonable Business Judgment;
- (2) Refrain from directly or indirectly, holding oneself/itself out to any person or entity, or represent themselves/itself as a present or former Casiola franchisee, except as directed by Franchisor in writing and related to Franchisee's performance and completion of Wind-Down Activities as designated and determined by Franchisor in Franchisor's Reasonable Business Judgment;
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
According to Casiola's 2024 Franchise Disclosure Document, the franchisor determines the Wind-Down Activities that allow a franchisee to deviate from restrictive covenants. Upon expiration, termination, or transfer of the Franchise Agreement, the franchisee must cease operating under the Casiola system, except as directed by Casiola in writing. These written directions are related to the franchisee's performance and completion of Wind-Down Activities.
Casiola designates and determines these Wind-Down Activities using their Reasonable Business Judgment. The franchisee must also refrain from representing themselves as a current or former Casiola franchisee, except as directed by Casiola in writing for the Wind-Down Activities.
Furthermore, the franchisee must abide by the restrictive covenants outlined in the agreement, unless Casiola directs otherwise in writing for the Wind-Down Activities. This means that Casiola has the authority to specify the actions a franchisee must take when closing their business and can provide exceptions to certain restrictions during this period.